Writers, Seeking a Salary Change for the Streaming Era, Prepare to Strike

When the last Hollywood strike took place 16 years ago, the internet had yet to transform television and film businesses. The broadcast networks still drew massive audiences and the cable channels continued to grow. The superhero boom had begun for movie studios, and DVDs generated $16 billion in annual sales.

Since then, rampant technological change has disrupted Hollywood in ways few could have imagined. Traditional television is on life support. Movie studios, stung by poor drama and comedy ticket sales, have retreated almost entirely to franchise shows. The DVD business is over; Netflix will ship its final small silver discs on September 29.

It’s a streaming world now. The pandemic has accelerated change.

What hasn’t changed much? The formulas used by studios to pay TV and movie creators, setting the stage for another strike. Writer compensation needs to evolve for a streaming-centric world, said Rich Greenfield, founder of research firm LightShed Partners.

Absent an unlikely last-minute resolution with studios, more than 11,000 unionized screenwriters could head to picket lines in Los Angeles and New York as early as Tuesday, an action that, depending on its length, would result in a phasing out of Hollywood’s creative assembly lines. . Writers Guild of America executives called it an existential moment, saying compensation has stagnated despite the proliferation of content in the age of streaming to the point that even writers with substantial experience struggle to advance and, at times, to pay their bills.

Writers at all levels and in all genres, whether feature films or television, were all devalued and financially exploited by studios, said Danny Tolli, a writer whose credits include Roswell, New Mexico and the Shondaland show The Catch.

These studios make billions in profits and they spend billions on content that we create with our blood, sweat and tears, Mr. Tolli continued. But there are times when I still have to worry about how I’m going to pay my mortgage. How I will support my family. I considered Uber to supplement my income.

Studio heads have largely maintained public silence, leaving communication to the Alliance of Film and Television Producers, which negotiates on their behalf. In statements, the organization said its goal is a mutually beneficial agreement, which is only possible if the guild commits to focus on serious negotiations and seek reasonable compromises.

Privately, many studio and streaming service executives described the writers as histrionic and out of touch. You can’t make a living as a TV writer? According to what standard? The business has changed; get used to it.

By some metrics, a major strike in Hollywood is long overdue. Since the 1940s, with few exceptions, strikes have rocked the entertainment industry almost like clockwork every seven or eight years, usually aligning with upheavals in the rapidly changing industry. The dawn of television. The rise of cable networks.

These things have to happen every five years or so, 10 years, says Clemenza, the capo Corleone skated in The Godfather, one of Hollywood’s most legendary creations, as the movies’ gangster families go on mattresses. against others. Helps get rid of bad blood.

For generations, since the end of the silent film era, Hollywood writers have complained that studios treat them like second-class citizens, that their artistic contributions are undervalued (and underpaid), especially by compared to those of actors and directors.

Among Hollywood workers, screenwriters walked off the job the most (six times) and were responsible for the entertainment industry’s most recent strike in 2007. It was a precarious economic time, the Great Recession was in course, but new media was on the horizon. Apple had started selling iPods capable of playing videos. Disney was offering $2 downloads for Lost episodes. Hulu was in the start-up phase.

The existing contract between the studios and the Writers Guild of America, which expires Tuesday at 12:01 a.m. PT, sets the minimum weekly salary for some television writer-producers at $7,412. (Experienced writers’ agents can negotiate this.) One issue, according to the guild, is the number of weeks writers work in the age of streaming.

Because of streaming, the network’s standards of 22, 24, or even 26 episodes per season are mostly gone. Most streaming series have eight to 12 episodes. As a result, the median writer-producer works nearly 40 weeks on a network show, according to guild databut only 24 weeks on a streaming show, which makes it difficult to earn a stable salary.

Residues were also undermined by streaming. Before streaming, writers could receive residual payments each time a show was resold in syndication, for overseas broadcast, on DVD. But global streaming services like Netflix and Amazon have cut off those distribution arms.

Instead, streaming services pay a fixed residual. The authors say there is no way of knowing if these fees are fair because the services hide audience data. A new contract, guild leaders said, must include a view-based residue payment formula.

Guild leaders say it would cost studios $600 million a year to give them everything they want. Companies, however, are under pressure from Wall Street to cut costs. And the gains for one group of entertainment workers should almost certainly be extended to others: Contracts with the Directors Guild of America and SAG-AFTRA, the actors’ union, expire on June 30.

Hollywood companies say they simply cannot afford widespread increases. Burdened with $45 billion in debt, Disney has laid off thousands of employees in recent days, part of a campaign to cut 7,000 jobs by the end of June. Disney+ remains unprofitable, although the company has pledged to change that by next year. Disney is Hollywood’s largest supplier of union-covered TV and comedy series (890 episodes for the 2021-22 season).

Warner Bros. Discovery, which has about $47 billion in debt, has already cut thousands of jobs as part of a $4 billion pullback. NBCUniversal is also tightening its belt in the face of cable cuts and a tough advertising market.

These companies remain very profitable. But they haven’t delivered the kind of steady earnings growth that Wall Street rewards.

The writers go into these talks with notable swagger. In 2019, when film and TV screenwriters fired their agents amid a campaign over what they saw as conflicts of interest, many agency executives thought the guild would eventually fracture. . It never happened: after a 22-month stalemate, the big agencies did indeed give writers what they wanted.

For screenwriters, there is also a pent-up demand for raises, worse by increasing inflation. When the writers last had a chance to negotiate a contract, the pandemic was shutting down Hollywood, and so the two sides came to a quick deal, which basically kicked the box in the words of Mr Greenfield. In the previous trading round, the writers focused more on bolstering their generous health plan.

And writers have been infuriated by companies’ mixed messages about their financial health.

NBCUniversal is operating extremely well operationally and financially, Brian Roberts, chief executive of Comcast, owner of NBCUniversal, wrote to employees last week when the division’s chief executive was ousted.

Netflix Co-CEO Ted Sarandos Received Compensation Worth $50.3 million in 2022, up 32% from 2021, Netflix revealed last week.

A lot of people are still getting really rich from the Hollywood product, but not the creators of that product, said Matt Ember, a screenwriter whose credits include Get Smart, The War With Grandpa and the animation Home.

The result: the situation could get worse before it gets better.

Every industry experiences course corrections, said Laura Lewis, the founder of Rebel Media, an entertainment production and finance company. This may be an opportunity to adjust models for the next phase of the entertainment industry.

The question, she continued, is how much pain will we have to endure to get there.

John Koblin contributed report.